State auditors said the Mount Vernon Industrial Development Agency keeps poor records and has lax oversight with tax breaks for companies that didn’t produce promised jobs.
The New York State Comptroller’s Division of Local Government & School Accountability reviewed the MVIDA for the period from Jan. 1, 2012 to July 29, 2013 and it found that Mount Vernon officials don’t have a specific criteria for documenting their decisions; they didn’t conduct cost-benefit analyses before doling out tax breaks; and that they didn’t have proper documentation for some of their contracts.
State auditors said that the MVIDA’s poor monitoring meant that some of the companies that had payment-in-lieu-of-taxes agreements were not making their payments on time, or it wasn’t clear how much was owed because of poor documentation. The owner of 650 Columbus Ave. owed about $129,000 as of July 13, 2013 and city officials made no effort to collect the money until after the state began its audit, the report stated.
Additionally, the MVIDA’s tax breaks didn’t produce the number of jobs the companies promised. Seven agreements were expected to create or retain 1,085 jobs, but the companies that got the tax breaks only reported 414 jobs as of Dec. 31, 2012.
“There is limited assurance that MVIDA projects have met their performance goals and benefited taxpayers,” stated the audit, which is posted on the state comptroller’s website.
Industrial development agencies are entities set up by local officials to stimulate economic development and create jobs by offering tax breaks. Mount Vernon projects that have received IDA benefits include the Target shopping complex and the Pepsi distribution center.
Margaret Finlayson, the MVIDA’s executive director/secretary, wrote in her response to the audit that her board took corrective action before and after the audit began. She said the board did not do cost-benefit analyses prior to the audit but did perform due diligence by reviewing applicants’ financial documents.
Finlayson also wrote that the auditors miscalculated the amount owed by 650 Columbus Ave. and that the actual amount owed was $83,000.
“We recognize that there were shortfalls in the overall monitoring and reporting of the projects, with specific reference to the evaluation of project performance,” she wrote.